Barclays Capital fined $3.75 million for electronic record retention failure

Matthew Finnegan |
Jan. 7, 2014

Email, instant message and trade data not kept in 'read-only' format for at least a decade

Barclays Capital has been handed a $3.75 million (£2.3m) fine for failing to properly preserve electronic records including emails and instant messages over a period of 10 years.

US regulator the Financial Industry Regulatory Authority (FINRA) found that the securities brokerage, a subsidiary of Barclays, failed to retain information including order and trade ticket data in the manner required from at least 2002 until 2012.

FINRA said that Barclays Capital had been required to keep its electronic records in ‘write-once, read-many’, or ‘WORM’, format, in order to show that data has been not been changed. The regulations are aimed at protecting investors and supporting antifraud provisions and financial responsibility standards.

FINRA also ruled that Barclays Capital did not retain attachments to emails sent through Bloomberg terminals between 2007 and 2010, and failed to properly preserve 3.3 million Bloomberg terminal originated instant messages dating from 2008 to 2010.

FINRA said that the ‘systemic’ failings on behalf of Barclays Capital were widespread and included all of the firm’s business areas, meaning that the company was “unable to determine whether all of its electronic books and records were maintained in an unaltered condition”.

It was also found that Barclays Capital lacked an adequate system and written procedures to achieve compliance with US regulator rules, and was unable to quickly detect and remedy these deficiencies.

"Ensuring the integrity, accuracy and accessibility of electronic books and records is essential to a firm's ability to meet its compliance obligations,” said Brad Bennett, FINRA executive vice president and chief of enforcement. “The format errors in this case made it nearly impossible for Barclays to verify that these key materials remained in an unaltered condition."

Barclays Capital neither admitted nor denied the FINRA charges, the regulator said, but did not oppose the fine.